Printemps 2011 - ADR Institute of Canada

tor would not bind third parties 10 .As set out in the introduction above, the dissenting judges wereunusually critical of Binnie J.’s approach. Justices LeBel andDeschamps first carefully reviewed Canadian jurisprudence onarbitration, concluding that, until the late 1980s, Canadian courtswere openly hostile towards arbitration. That hostility eventuallygave way to a new approach, to the effect that where a legislatureintends to exclude arbitration as a vehicle for resolving a particularcategory of legal disputes, it must do so explicitly 11 .Next, they explained that the CAA was influenced by the ModelLaw with the result that the reasoning in Dell applied 12 . As to theproper interpretation of the BPCPA, LeBel and Deschamps JJ.reasoned that s. 3 was intended to protect substantive rights – however,in what forum these rights are to be dealt with is a proceduralmatter:An arbitrator can grant the remedies contemplated in s. 172 ofthe BPCPA against TELUS. The arbitration agreement betweenMs. Seidel and TELUS does not therefore constitute an improperwaiver of Ms. Seidel’s rights, benefits or protectionsfor the purposes of s. 3 of that Act. Consequently, the BPCPA,in its current form, does not provide a court considering a stayapplication under s. 15 of the CAA with a reason for refusing togrant it. Section 3 of the BPCPA does not prohibit agreementsunder which consumer disputes are to be submitted to arbitrationor that otherwise limit the possibility of having a proceedingcertified as a class proceeding, since s. 172 of the BPCPAmerely identifies the procedural forum in which an action withrespect to the rights, benefits and protections provided for ins. 172 may be brought in the public court system. However, s.172 does not explicitly exclude alternate fora, such as an arbitrationtribunal from acquiring jurisdiction.CommentDid the majority get it right? The relevant language in the OntarioConsumer Protection Act, 2002 13 is as follows:No waiver of substantive and procedural rights7. (1) The substantive and procedural rights given under thisAct apply despite any agreement or waiver to the contrary.Limitation on effect of term requiring arbitration(2) Without limiting the generality of subsection (1), anyterm or acknowledgment in a consumer agreement or arelated agreement that requires or has the effect of requiringthat disputes arising out of the consumer agreementbe submitted to arbitration is invalid insofar as itprevents a consumer from exercising a right to commencean action in the Superior Court of Justice givenunder this Act.Non-application of Arbitration Act, 1991(5) Subsection 7(1) of the Arbitration Act, 1991 [judicialstay] does not apply in respect of any proceeding towhich subsection (2) applies unless, after the disputearises, the consumer agrees to submit the dispute toarbitration.Class proceedings8. (1) A consumer may commence a proceeding on behalf ofmembers of a class under the Class Proceedings Act,1992 or may become a member of a class in such aproceeding in respect of a dispute arising out of a consumeragreement despite any term or acknowledgmentin the consumer agreement or a related agreement thatpurports to prevent or has the effect of preventing theconsumer from commencing or becoming a memberof a class proceeding.Non-application of Arbitration Act, 1991(4) Subsection 7(1) of the Arbitration Act, 1991 does notapply in respect of any proceeding to which subsection(1) applies unless, after the dispute arises, the consumeragrees to submit the dispute to arbitration.When this language is compared with s. 3 of the BPCPA, onewonders why Binnie J. considered the latter to reflect a legislativeintent to oust the parties’ clear choice in favour of arbitration. Hiscontention that s. 172 of the BPCPA confers a right, benefit orprotection that is sheltered under s. 3 of the BPCPA presupposesthat having to bring a s. 172 claim in an arbitration is worth lessthan in a court of law. Given the evolution and acceptance ofADR, including commercial arbitration, in Canadian courtsin the past two decades, that presupposition is open to seriousquestioning.Binnie J.’s argument that arbitration is antithetical to the publicpurposes of s. 172 (in that private arbitration cannot offer the sameremedies set out in s. 172) is also not so clear cut. Firstly, anyarbitral award is enforceable in the courts and, thus, open to publicscrutiny. This would also engage the principle of deterrence,with which Binnie J. appears to have wrestled. Moreover, as thedissent pointed out, correctly, under modern statutes in Canada,including British Columbia, arbitrators have the jurisdiction togrant “specific performance, rectification, injunctions andother equitable remedies”. 14 Viewed in this light, there isconsiderable scope to suggest that the dissenting reasons aremore persuasive.It should also be pointed out that shortly after TELUS was releasedthe United States Supreme Court held (on a 5-4 basis) thatan arbitration provision in a consumer contract prohibiting classwideprocedures is not unconscionable 15 . In doing so, that courtheld that s. 2 of the Federal Arbitration Act (“FAA”) 16 (whichmakes agreements to arbitrate “valid, irrevocable, and enforceable,save upon such grounds as exist at law or in equity for therevocation of any contract”) could not be invoked to override anarbitration/no class action clause. It is quite clear, then, that in theconsumer context, the United States Supreme Court has taken adifferent approach than the Supreme Court of Canada.But are there real consequences to this in Canada? We submit thatthe answer is “no”. It is true that the open schism between themajority and the dissent is rather surprising. Deference to arbitrationhas, after all, become a hallmark of Canada’s justice system.Canadian Arbitration and Mediation Journal60